Reply to: Contracting outside IR35 to same client via Independent Service Provider

[WordIsBond]

I should add that my above comment is not based on any assessment as to whether OP actually should be inside IR35 or not. Despite what some people apparently think, he's given us insufficient evidence to assess that.

I only wish to state that my view is that if HMRC encounters this situation there are significant risks to the client as well as OP, far beyond the ones they are thinking of. It runs the risk of turning a winning IR35 case (if they have a winning case) into a losing one by prejudicing HMRC and the tribunal.

[WordIsBond]

It seems to me that the risk is primarily for the supply chain above you, including the true end client (which is almost certainly not the ISP) and primarily when an actual investigation takes place, not before. I think the risk to you is comparatively low. But let's be clear, your description alludes to it being a sham arrangement to try and disguise the true end client:

I agree that the risk to OP is very low from April forward.

The risk is that the end client is seen to be operating a sham, as you've said. That greatly raises the IR35 risk, in my opinion. It shouldn't, IR35 should be judged on the facts of the engagement, but entering into a sham on determination / liability will prejudice both HMRC and a tribunal on any succeeding IR35 case. The chances of losing such a case become exponentially higher, in my view -- it will be stated, with no really good rejoinder possible, that the only reason for the sham was to avoid IR35 liability.

By agreeing to enter into this sham agreement, OP also runs the significant risk of stirring HMRC hostility which would be bound to lead to historical investigations as well. It increases the risk of losing those investigations for the reasons stated above. It will certainly give HMRC cover to say that they have reason to suspect fraud. And it will, again in my view which may be mistaken, be used to prejudice the tribunal against OP in historical investigations as well.

It will allow HMRC to argue that OP has not been operating a good faith effort to be within the law, and thus OP could even be the first IR35 case in which they try to pierce the corporate veil. And there is a chance they could succeed.

Perhaps I'm paranoid but I see huge risks here.

[jamesbrown]

But the OP, whose case we are discussing, made it clear that he only had one customer, for five years. That sounds awfully close to disguised employment to me.

What about the temps doing high-skill non-BAU work, exploited by their clients? Do they need to be saved, too?

As you know, I was responding to your assertion that any contract over two years is disguised permiedom. It’s absolute nonsense. It’s no different to asserting that any contract under three months is disguised temping. Facts do actually matter. The whole everyone-but-me-caused-this-problem schtick is tedious. When HMRC say that the genuinely self-employed won’t be impacted, they mean that no contractor is genuinely self-employed. HTH.

[Disguised Contractor]

Says the troll.

First amateur mental health evaluations, now silly provocative name-calling... I obviously must have really touched a nerve by contesting your gloomy prognostication for the rest of the year with a more balanced and open-minded point of view, mustn't I?

I think this whole thread was started by a troll, and I'm not interested in perpetuating it further, so I have nothing more to say. PM me if you feel a need to abuse me some more.

[Disguised Contractor]

What legitimate business turns down repeat business? Duration has never been a strong indicator, especially if you have multiple clients at once.

But the OP, whose case we are discussing, made it clear that he only had one customer, for five years. That sounds awfully close to disguised employment to me.

It does make me chuckle how the average contractor has been so cowed by IR35 that they really cannot think like a proper business. It's the temps doing low-skill BAU work, exploited by their clients, that need to be saved from contractordom (not that I blame them either).

What about the temps doing high-skill non-BAU work, exploited by their clients? Do they need to be saved, too?

[Disguised Contractor]

What a load of rubbish. You must be one of these agile numpties suggest you stick to the 2 weeks sprints and the never ending defects.

Definitely a troll. Why not throw in an unqualified mental health evaluation, while you're here?

Now doing my 3rd consecutive Data centre consolidation for a multi national. My projects are highly complex requiring specialist skill sets. Generally 24 month to deliver from start to finish.

Yes, I've done those, too - what are those "specialist" skills? Desoldering twinax?

If the perms had my skill set they would be out contracting like the rest of us

Oh, another troll that I won't rise to. But I'll pass on your evident respect to everyone who is having to now go permanent (if they're lucky) because their end-clients decided to turn practically the whole market inside-IR35, even the stuff that was blatantly outside.

[northernladuk]

There are soon going to be 1000s of contractors that were outside IR35 that are now suddenly inside. Do you not think the half dozen admins they have hired will have their hands full working there way through that backlog before the get to me.

I'll be long retired to my villa in Spain before they even scratch the surface.

So even worse you are banking on the lottery that they don't have enough people and might pick someone else first.

Sorry to burst your bubble but with 5 years to chomp on you will be top of the list.

It appears you are just looking for the a seer you want to hear so go for it, you'll be fine.

[northernladuk]

(Is this a troll question? I'm feeling trolled.)

Says the troll.

[jamesbrown]

If a project is longer than 2 years then you aren't a contractor and should be permanent.

Absolute pap. That is the true disguised permie mindset. What legitimate business turns down repeat business? Duration has never been a strong indicator, especially if you have multiple clients at once. It does make me chuckle how the average contractor has been so cowed by IR35 that they really cannot think like a proper business. It's the temps doing low-skill BAU work, exploited by their clients, that need to be saved from contractordom (not that I blame them either).

[Deepcut]

You have been found inside IR35, because you are inside IR35. You should have been made a permanent member of staff a long time ago.

You are exactly the kind of disguised employee that the contracting model was never intended to support, shouldn't have been (unless you have some extenuating circumstances such as extreme travel arrangements), and has now effectively killed a perfectly valid business model for the rest of us who believe ourselves to be effectively in business for ourselves, serving multiple clients a year, taking risk without obligation.

Thank you very much.

(Is this a troll question? I'm feeling trolled.)

What a load of rubbish. You must be one of these agile numpties suggest you stick to the 2 weeks sprints and the never ending defects.

Now doing my 3rd consecutive Data centre consolidation for a multi national. My projects are highly complex requiring specialist skill sets. Generally 24 month to deliver from start to finish. If the perms had my skill set they would be out contracting like the rest of us

[Drei]

You have been found inside IR35, because you are inside IR35. You should have been made a permanent member of staff a long time ago.

You are exactly the kind of disguised employee that the contracting model was never intended to support, shouldn't have been (unless you have some extenuating circumstances such as extreme travel arrangements), and has now effectively killed a perfectly valid business model for the rest of us who believe ourselves to be effectively in business for ourselves, serving multiple clients a year, taking risk without obligation.

Thank you very much.

(Is this a troll question? I'm feeling trolled.)

Agreed, I am pissed off at people like that, I don't like to be tied down so I may have multiple contracts in a year or just one. I also like to take longer time off. I don't usually stick longer than a year because tulip starts to stink and it feels like I am a permanent member of staff. Contractors are an expensive resource brought in to do the stuff that permanents can't do. If a project is longer than 2 years then you aren't a contractor and should be permanent. I don't make tulip loads of money because I like my work life balance, so being a contractor, working when I want for who I want was great. Now I can't because of people like you

[Disguised Contractor]

Hi All,
I have been contracting with the same blue chip client for 5 years, I tend to get offered the high profile projects (the one's they can't afford the perms to tulip).

You have been found inside IR35, because you are inside IR35. You should have been made a permanent member of staff a long time ago.

You are exactly the kind of disguised employee that the contracting model was never intended to support, shouldn't have been (unless you have some extenuating circumstances such as extreme travel arrangements), and has now effectively killed a perfectly valid business model for the rest of us who believe ourselves to be effectively in business for ourselves, serving multiple clients a year, taking risk without obligation.

Thank you very much.

(Is this a troll question? I'm feeling trolled.)

[Andy Hallett]

I'll be long retired to my villa in Spain before they even scratch the surface.

I was wondering why there is little public sympathy for contractors on this matter, thanks for clearing that u for me.

[GhostofTarbera]

Deemed you inside IR35

Put aside 35% of each years gross income to cover back inside tax and penalty’s


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[BR14]

so walk then.
what's the point of this thread if you're so cocksure about it?